Gold price soars amid global bank market fears

Credit Suisse buyout has not fully calmed markets so the haven rose above $2,000 an ounce for the first time in a year

Bullion surged 6.5% last week in its biggest advance since early on in the pandemic. Stock picture

Gold slipped after earlier rising above $2,000 an ounce for the first time in a year as a deal to buy Credit Suisse Group failed to fully ease fears over the global banking sector.

The haven earlier rose as much as 1% despite regulators worldwide rushing to shore up market confidence over the weekend.

The ongoing banking woes are also spurring bets that central banks may embark on a slower pace of monetary tightening.

Bullion surged 6.5% last week in its biggest advance since early on in the pandemic after several regional American lenders collapsed and concerns grew over the Swiss bank’s health.

The treatment of some bondholders in the rescue of the Swiss bank “introduced a new source of uncertainty”, Marcus Garvey, head of metals strategy at Macquarie Group, wrote in a note.

“The longer uncertainty rolls on, with neither market fears being wholly calmed nor a full-blown systematic crisis unfolding, the higher gold prices should be able to trade,” he said.

It’s a sharp turnaround for bullion, which slid last month on expectations the Federal Reserve would continue its aggressive monetary tightening to curb inflation. Those bets have since been greatly diminished, with swaps traders now split on whether the central bank will hike again this year.

• Bloomberg